Marcos Vetoes DLPC Ranch Law

President Ferdinand R. Marcos Jr. vetoed House Bill (HB) 10554 or Davao Light and Power Company Inc. Franchising Area Expansion Act. (DLPC).

According to the Philippine Rural Electric Cooperatives Association (PHILRECA), in a letter addressed to the Senate and House of Representatives, the President acknowledges the intention of the bill to further improve and expand access to electricity in the limited market of the extended franchise area. However, he is “forced to veto the bill due to the susceptibility of the proposed expansion of the Davao Light and Power Company, Inc.” franchise area. to legal and/or constitutional challenge due to apparent duplication and possible violation of existing franchise, permits and contracts previously granted by North Davao Electric Cooperative Inc. (NORDECO)”.

Davao Light is the third largest private electricity company in the Philippines owned by Aboitiz Power Corp. (AboitizPower).

“We have received information that Malacañang has vetoed HB 10554, which is intended to expand the franchise area of ​​Davao Light, a subsidiary of Aboitiz Power, to Davao del Norte. Rest assured that we will cooperate with the relevant authorities and respond to their instructions,” said AboitizPower President Emmanuel Rubio.

NORDECO has existing franchises in the extended franchise area that will run until 2028 and 2033. The bill, according to the president, is contrary to section 27 of Republic Act (RA) 9136 or the Electricity Reform Act (EPIRA). prescribing that all existing franchises be allowed for the duration of their validity.

“Similarly, the subsequent cancellation of the North Davao Electric Cooperative Inc. franchise. in relation to the extended franchise area would violate the no-damage clause provided for in Section 10 of Article III of the 1987 Constitution,” the President added in his letter.

The president also said that HB 10554 “is a prohibited collateral attachment to North Davao Electric Cooperative Inc. franchise” and such a bill “contradicts the well-established judicial doctrine that a franchise cannot be subject to a ‘collateral attack’.

During public hearings in the House of Representatives and the Senate, PHILRECA, an association of electrical cooperatives operating throughout the country, clearly opposed HB 10554 for the same reasons.

NORDECO received a franchise on the basis of Certificates No. 017 and 103 issued by the National Electrification Administration for a period of 50 years starting in 1978 and 1983, respectively, which means that the existing NORDECO franchise will only expire in 2033,” said Janine Depay-Kolingan, Executive Director of PHILRECA, in position document. the group presented to the Office of the President.

“In addition to the protection expressly guaranteed by RA 9136 or EPIRA and the no-harm clause of the Constitution, RA 6038 makes it very clear that no right of service may be granted to any other person in any area or part in which a cooperative is located. franchise,” PHILRECA said in a letter to the president.

“We thank the president for responding positively to the plight of the Movement against the takeover of the EU by private business corporations and oligarchs such as the Davao Light and Power Company,” Colingan said in response to the president’s veto on HB 10554.

She added that “electric cooperatives must remain owned and run by the people, not by oligarchs, not by a few elites,” and that the organization and all of its constituent electrical cooperatives appreciate the President’s recognition of the vital role of the national development sector.

“Not a Side Attack”

Senator Grace Poe, chair of the Senate Public Services Committee, said the proposed expansion of the DLPC franchise area is not a side attack, “but is in fact a response to Nordeco’s customers’ call for better power supplies.”

“The ‘collateral attack’ argument on franchises can only be applied in a judicial or administrative proceeding where the parties may otherwise attempt to strike down a law that is legally considered valid. This does not apply to the exercise of legislative functions by Congress, especially in the context of Section 11 of Article XII of the Constitution,” she said.

Poe also said that Congress made sure that the franchise expansion would not violate existing laws, including EPIRA, or any constitutional or case law.

“If the Constitution permits, the extension of suffrage expressly falls under ‘amendment, modification or repeal by Congress when the common good so requires,'” she said.

“There is also no violation of the no-damage clause of the Constitution, since that does not apply to franchises. The power of the police was found to subordinate the non-injury clause to “the interests of public health, safety, morals and the general welfare”.